SAFARICOM AND TELKOM KENYA LTD TO FORM TOWER SHARE FIRM

Posted on June 13, 2011

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Key Initiative Meant to Manage Opex and Underpin Sustainability

Nairobi, June 13, 2011… Safaricom and Telkom Kenya Ltd have announced plans to form a jointly owned tower management company.

In a regional first, the two companies indicated that they were in advanced negotiations, expected to be concluded in the next three months, towards the formation of an independently-managed infrastructure company.

Commenting on the announcement, Safaricom CEO Bob Collymore stated: “We have been in talks for a while now assessing the viability of this initiative which was prompted by the need for the industry to explore improved cost efficiency on infrastructure management which forms a significant portion of our operational expenses.”

He added, “We are equally cognizant of the environmental impact caused by the continued replication of infrastructure. This initiative will lead to a rationalization of those duplications in the interest of the public good and overall environmental sustainability”.

Technical and financial experts from the two companies are currently working on the finer details of the transaction, which is expected to be largely modelled along the lines of international tower companies like India’s Indus Towers, a consortium of telecom operators in that country.

Said Telkom Kenya CEO, Mickael Ghossein: “The two companies have over 4,000 towers between themselves and we expect that in addition to the initial equity and debt financing, each partner will contribute some of its existing infrastructure into a common pool. We also expect to consolidate future needs through central planning and deployment so as to take advantage of the economies of scale presented by this deal.”

Initially, the proposed company will be formed between Telkom Kenya Ltd, Safaricom and a mutually designated professional and independent tower management company on agreed terms. Later, the consortium expects to invite other players into the company either as shareholders or customers on an open access model.

Details released by the two companies indicate that the new tower company will seek and operate on a separate Network Facilities Provider (NFP) license from industry regulator CCK in order to allow it operate on an open access model.

The joint tower management company is expected to focus on leasing collocated tower space to anyone wishing to install wireless communication equipment and will also be involved in management of energy costs.

The two firms are expected to reap maximum cost management benefits from the formation of the new outfit not just in operational expenses (Opex), but there will also be significant savings to be gleaned in Capex (capital expendiiture) from the consolidation of future needs and joint network rationalization and rollout.

ENDS…

For more details please contact:

Angela Ng’ang’a- Mumo

Head of Corporate Communications

Telkom Kenya Ltd

0772 548066

anganga@orange-tkl.co.ke

OR

Washington Akumu

Senior Manager-Public Relations

Safaricom

0724 509 033

wakumu@safaricom.co.ke

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